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In the realm of business-to-business electronic commerce also, notable structural
differences exist between Asia and North America. They include the disproportionate
contribution of direct goods to final products relatively inefficient and fragmented supply
chains, smaller domestic markets, and less developed infrastructure for electronic
commerce. Each of these about IAS exam structural differences has a significant influence
on the patterns of B2B e-commerce emerging in Asia. Direct goods often pose greater
challenges in product specification and cataloging than indirect materials, and e-
marketplace operators necessarily develop capabilities in this domain. The potential
benefits e-marketplaces— increased supply chain efficiency through reducing the number
of intermediaries or through information the supply chain—are greater in Asia than in the
West, where there are already fewer intermediaries and more efficient supply chains. Many
Asian e-marketplaces target Asian MNCs and large buyers from the West and seek to link
them with smaller Asian suppliers. Finally, the lack of supporting infrastructure in much of
Asia means that e-marketplaces have to provide numerous complementary services in the
areas of logistics, payments, assurance, and credit checks for a successful launch.

These differences are well illustrated by an industry important in both locales—nonferrous
metals. In this industry, key structural characteristics plausibly related to e-commerce
business models and e-business adoption differ sharply in China and the US—industry
consolidation/fragmentation, spot versus systematic sourcing patterns, and e-commerce
infrastructure. Industry concentration is an important structural condition likely related to
e-commerce activity, because about civil services fragmentation is believed to promote the
formation of electronic marketplaces and .In the US, the ten largest companies account for
70% of aluminum extrusion production. In China, the ten largest companies produce only
30%; about 600 small companies account for roughly half of all production. Therefore, one
would expect that electronic marketplaces would be more successful in the highly
fragmented Chinese nonferrous metals industry than in the US, where the industry is quite
concentrated.

Industry sourcing patterns—systematic versus spot—are also plausibly related to e-
commerce activity, since widespread use of spot purchasing is believed favorable to the use
of electronic exchanges. In the US, systematic sourcing of nonferrous metals predominates,
whereas spot purchasing is more common in China. Again, one would expect electronic
marketplaces to be more successful in China. Just how important it is to look beyond broad
characterizations of national culture is amply demonstrated by a study of organizational
control practices in Chinese joint ventures: Robins and Zhiang (2000) found significant
differences between Sino-American and Sino-Japanese joint ventures, indicating that the
multinational parent, not just the local culture, is an important explanatory factor.
However, while both industry fragmentation and spot sourcing patterns favor e-
marketplace activity, the quality of e-commerce infrastructure does not. The quality of the
e-business infrastructure differs greatly between China and the US in a direction that bodes
ill for the use of electronic marketplaces in China. For example, China lacks a well-
functioning electronic payment system.

								
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